Of the pending amount, the biggest liability of Rs 2,175 crore is on account of free power to farmers.

Unenviable inheritance: the present Congress govt has been clearing bills left by the previous Akali Dal-BJP regime while its own liabilities are piling up. (HT Photo)

Nine months into power, the Congress government is still struggling with its unenviable inheritance. It has been clearing bills left by the previous Akali Dal-BJP regime while its own liabilities are piling up.

As on January 2, dues amounting to Rs 6,100 crore are stuck in the state treasury, including salary and retirement benefits of employees and payouts for social welfare schemes. The finance department has written to all major departments undertaking development and other works to freeze new proposals and clear liabilities of the previous government first.

Of the pending amount, the biggest liability of Rs 2,175 crore is on account of free power to farmers. From this month, the Captain Amarinder Singh government has also committed to foot lower tariff of Rs 5 per unit to industry as promised by the party election manifesto.

The cash crisis has also led to pendency of Rs 1,580 crore on account of salary and retirement benefits.

While Rs 750 crore are salary dues, Rs 830 crore has accrued for provident fund, leave encashment and other retirement benefits. The government has also yet to clear old age pensions to the tune of Rs 522 crore.

The previous government had not disbursed pensions to the elderly, the disabled and widows since November 2016 and the backlog till March 31, 2017, was cleared by the new government after it took over on March 16.

The legacy of Rs 31,000 crore cash credit limit (CCL) has proved the proverbial last nail in the coffin. Punjab had to pay Rs 3,240 crore to service it so far, which has derailed government’s plans to avail more funds from central schemes by paying state’s share.

Though the delayed remittance of goods and services tax (GST) by the Centre is partly to blame for the financial crunch, the major reason, said a department official, is the “reckless expenditure and mismanagement” by the previous government.

Punjab finance minister Manpreet Badal says since they took over in March, they have been clearing pending bills. “The backlog had to be cleared. We are still paying bills that they didn’t,” he says. The time lag in GST remittances may be resolved by end of this fiscal but the state would need three more years on the road to recovery. In his budget speech, the finance minister had predicted to be revenue surplus by the government’s fourth year.

Drawing up a fiscal roadmap

Before the budget session in March, the Punjab Governance Reforms and Ethics Commission headed by KR Lakhanpal will be getting experts from a premier institute on board to prepare a fiscal consolidation roadmap for the state.

Lakhanpal, a former chief secretary and finance secretary, said the National Institute of Public Finance and Policy, an autonomous research body under the Union finance ministry, will be engaged for a specific time to draw a blueprint before the budget.

“The institute’s chairman will be visiting Punjab on January 24 and 25. The experts will give their recommendations in six weeks, which will be put up before the cabinet committee. In six months, they will prepare a complete roadmap for improving the financial health of the state,” Lakhanpal said.